It’s hard to overstate just how unpopular and politically toxic the offshore tax system is in this country.
But that hasn’t stopped a bipartisan group of lawmakers from trying.
The bill introduced Thursday by Sens.
Tammy Baldwin Tammy Suzanne BaldwinDems push Trump to scrap US-Mexico border wall, tax on overseas cash for home owners | Trump says he’ll announce details of new trade deal within days | GOP to introduce border wall bill in coming weeks MORE (D-Wis.) and Tom Cotton Thomas (Tom) Bryant CottonGOP senator vows to probe Senate GOP for ‘guts’ on Kavanaugh Trump administration mocks Ford for trying to blame Democrats for Kavanaugh’s vote Cotton: ‘I’ve always thought it was the Democrats who wanted to get him impeached’ MORE (R-Ark.) aims to end the tax evasion and abuse that the offshore industry exploits by keeping a portion of its profits offshore.
The lawmakers’ bill, dubbed the Tax Fairness Act, would allow Americans to claim the “pass-through” income tax benefits for up to $10,000 in adjusted gross income.
They also would end the offshore business tax loophole that allows U.S. companies to pay lower rates on their foreign earnings.
The legislation would also allow American companies to repatriate foreign profits to the U.K. and pay a 20 percent tax on them.
The senators say their legislation is intended to help the U,S.
economy by making it easier for American companies and American workers to compete in the global financial sector.
But the offshore profits tax break is unpopular among many Republicans, who see it as a slap in the face to U.C.I.O. workers and a slap to American companies that pay a tax that is not required by law.
The offshore profits loophole was a major reason why the US. lost $1.6 trillion in profits last year, according to a report by the Congressional Research Service.
Baldwin’s bill would extend the tax break to foreign earnings for up-front taxes paid to the CFIOS, which would be taxed at a higher rate than domestic earnings.
“The offshore tax loopholes make it easier to take home money overseas and then avoid paying the UCC tax, and that’s just not fair,” Baldwin said.
“The bottom line is the tax breaks are not designed to help our economy.”
Cotton, the bill’s author, said the bill would help the country compete with countries that have the tax system in place to encourage U.N. member nations to work with their neighbors to solve global economic problems.
“If the UCEOs and CFIOs are not going to take the lead in finding ways to fix the problems that are causing them, the UCAO and CFAOs can,” he said.
Cotton has been working on the bill for months and has received a slew of support from Republicans, including from the chairman of the Senate Foreign Relations Committee, Bob Corker Robert (Bob) Phillips CorkerLeft’s media circus makes Dems nervous about Kavanaugh Corker predicts a ‘tremendous’ outcome in Senate GOP showdown MORE (Tenn.), who has voiced support for the legislation.
Citing Corker’s support, Baldwin added that she believes “that we are on the right track and that the bill is a win for the American people.”
Democrats have argued that the tax benefits would create a powerful incentive for U.P.S.’s to stay in the offshore sector, and their bill is designed to close the loophole that the CFEOS has largely ignored.
Sen. Bernie Sanders Bernard (Bernie) SandersPoll: Gillum leads DeSantis by double digits in Florida Senate race Sanders: Kavanaugh accusers should not be afraid to come forward Sanders: Dems hold firm on Kavanaugh MORE (I-Vt.), who supports the offshore earnings tax break, said he expects it to pass the Senate and get to the president’s desk.
The Senate Finance Committee is scheduled to vote on the bipartisan legislation at 2 p.m.
The bill now heads to the full Senate.